BRUSSELS (Reuters) - The European Court of Justice ruled on Wednesday that local authorities in London’s Westminster were charging sex shop operators too much to apply for licences, infringing on EU rules designed to promote service activities.

With institutions such as the Houses of Parliament and 10 Downing Street, Westminster is where the heart of the British government sits, but it is also home to Soho, an area known for its sex shops and nightlife.

The long-running case was brought by the operator of Simply Pleasure Ltd and others against Westminster city council, which charged nearly 30,000 pounds for a one-year licence to run sex shops in the area.

This sum was made up of a non-refundable administration fee of nearly 2,700 pounds, while the remainder went towards running the licence enforcement scheme, including the detection and prosecution of unauthorised sex shops or activities.

All but the administration fee was refundable if the licence was refused.

The plaintiffs had earlier won a partial victory in a judicial review, prompting Westminster to appeal, principally over the issue of whether it could charge the full fee at the time of application.

The British judges then asked the EU court whether this was consistent with the EU services directive.

The EU court said the cost of making an application should not exceed the cost of the administration process, even if an element was refundable, saying the aim of the services directive was to facilitate access to service activities.